It was a rotational week as the S&P 500 and NASDAQ (Large Cap Growth) marked their biggest weekly losses since the week of 19 April 2024, while the Dow Jones Industrial (Cyclical) and Russell 2000 (Small Cap) scored weekly gains. The week started off on a bullish note as Fed Chair Powell said the previous week's CPI reading increased their confidence that inflation is getting under control. Looking forward to a September rate cut, the S&P 500 powered upward to another all-time high on Tuesday, the 7th in the last 10 days. On Wednesday those Magnificent 7 growth stocks started a sell off with a daily loss of over 1% for the S&P 500. This continued into Thursday, while Fridays bearish market action was dominated by CrowdStrike software update concerns. All told, the S&P 500 closed Friday at 5,505. Overall, the last three days of the week were Glass Half Empty, but expanding the time frame some makes it seem like it is still Glass Half Full. As mentioned above, the S&P 500 made new all-time highs in 7 of the last 10 trading days, and has made 7 straight new intraweek record highs, including this one. Also, while the S&P 500 closed below its 20 day Moving Average (MA) on Friday, this is the first time since 30 May, which was only a one-day excursion. While no one likes to see the markets go down, they do not move up in a straight line, so what would raise a concern? The first is the support level of 5,446. Looking at the last two S&P 500 weekly green bars, 5,446 is the low point. Second would be a cross of the S&P 500 10 day Exponential MA below its 20 day Simple MA. So lets look at history and see what has happened in the past. As mentioned above, this week marked the biggest weekly loss for the S&P 500 since the week ending 19 April 2024, when it lost 3.05%. Friday, 19 July also marked three months to the day from Friday, 19 April. And what happened three months ago? On Monday 22 April, the S&P 500 opened at 4,987, had a weekly gain of 2.67%, which set the stage for this past Tuesdays new intraday high of 5,669. Coincidentally, both week afters mark the start of the two week Mega Cap earnings season, highlighted this quarter with Microsoft, Alphabet and Tesla reporting after Tuesdays close. On the economic front, the key highlight will be the Core PCE Month over Month inflation number on Friday. For TSP TIPS the C fund still ranks at the top of the Performance Ranking leaderboard, but the S fund has overtaken the I fund. On Tuesday both the C and S funds made new 52 week highs, while the F fund made one on Wednesday. All four funds (C/S/I/F) remain positive for July, with the S fund being the only one with a weekly gain this week. As such, we are recommending the following new investment mix.
It was a rotational week as the S&P 500 and NASDAQ (Large Cap Growth) marked their biggest weekly losses since the week of 19 April 2024, while the Dow Jones Industrial (Cyclical) and Russell 2000 (Small Cap) scored weekly gains. The week started off on a bullish note as Fed Chair Powell said the previous week's CPI reading increased their confidence that inflation is getting under control. Looking forward to a September rate cut, the S&P 500 powered upward to another all-time high on Tuesday, the 7th in the last 10 days. On Wednesday those Magnificent 7 growth stocks started a sell off with a daily loss of over 1% for the S&P 500. This continued into Thursday, while Fridays bearish market action was dominated by CrowdStrike software update concerns. All told, the S&P 500 closed Friday at 5,505. Overall, the last three days of the week were Glass Half Empty, but expanding the time frame some makes it seem like it is still Glass Half Full. As mentioned above, the S&P 500 made new all-time highs in 7 of the last 10 trading days, and has made 7 straight new intraweek record highs, including this one. Also, while the S&P 500 closed below its 20 day Moving Average (MA) on Friday, this is the first time since 30 May, which was only a one-day excursion. While no one likes to see the markets go down, they do not move up in a straight line, so what would raise a concern? The first is the support level of 5,446. Looking at the last two S&P 500 weekly green bars, 5,446 is the low point. Second would be a cross of the S&P 500 10 day Exponential MA below its 20 day Simple MA. So lets look at history and see what has happened in the past. As mentioned above, this week marked the biggest weekly loss for the S&P 500 since the week ending 19 April 2024, when it lost 3.05%. Friday, 19 July also marked three months to the day from Friday, 19 April. And what happened three months ago? On Monday 22 April, the S&P 500 opened at 4,987, had a weekly gain of 2.67%, which set the stage for this past Tuesdays new intraday high of 5,669. Coincidentally, both week afters mark the start of the two week Mega Cap earnings season, highlighted this quarter with Microsoft, Alphabet and Tesla reporting after Tuesdays close. On the economic front, the key highlight will be the Core PCE Month over Month inflation number on Friday. For TSP TIPS the C fund still ranks at the top of the Performance Ranking leaderboard, but the S fund has overtaken the I fund. On Tuesday both the C and S funds made new 52 week highs, while the F fund made one on Wednesday. All four funds (C/S/I/F) remain positive for July, with the S fund being the only one with a weekly gain this week. As such, we are recommending the following new investment mix.